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Reselling or agency selling? Sales mode selection for a manufacturer in private label competition under information asymmetry

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  • Min Yang
  • Anqi Li
  • Yang Yang

Abstract

Big data systems enhance retailers’ predictive capabilities, providing them with a significant advantage in understanding end-market demand, increasing the competitiveness of retailers’ private labels, and significantly impacting manufacturers’ sales strategies. This paper applies dynamic game-theoretic models to explore the interaction between the retailer’s information-sharing strategies and the manufacturer’s sales mode selections when the retailer introduces a private label. Through backward induction, the equilibrium strategies of both parties can be derived. The results show that the manufacturer consistently benefits from information-sharing under both sales modes, potentially achieving a win-win outcome under the agency selling mode. Improving the retailer’s information forecast accuracy encourages a shift from reselling to agency selling mode. The retailer’s lower information forecast accuracy or the smaller demand variance offers no first-mover advantage to either the manufacturer or the retailer. Additionally, an Information Compensation Mechanism (ICM) for revenue-sharing is proposed, and contract conditions across different sales modes are discussed.

Suggested Citation

  • Min Yang & Anqi Li & Yang Yang, 2026. "Reselling or agency selling? Sales mode selection for a manufacturer in private label competition under information asymmetry," PLOS ONE, Public Library of Science, vol. 21(2), pages 1-29, February.
    • Handle: RePEc:plo:pone00:0341467
    DOI: 10.1371/journal.pone.0341467
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    References listed on IDEAS

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    1. Sergio Meza & K. Sudhir, 2010. "Do private labels increase retailer bargaining power?," Quantitative Marketing and Economics (QME), Springer, vol. 8(3), pages 333-363, September.
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